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Vietnamese stocks slump as trading stampede sparks outage

HANOI, Jan 19 (Reuters) - Vietnam’s VN-Index saw its biggest single-session fall in 20 years as Vietnamese stocks closed down 5.1% in their worst day in nearly six months on Tuesday, with a sudden spike in sell orders causing a trading system freeze.

After a near 20 minute outage in the morning session, the trading system for the Ho Chi Minh Stock Exchange was completely halted in the afternoon, a source with direct knowledge of the matter told Reuters.

“Several investors, especially newbies, were thrown into a state of panic selling,” an analyst at VNDirect Securities said.

Total trading volume during the day soared to a record high of 18 trillion dong ($780 million), the exchange said.

Analysts and brokers all said the stock market correction was anticipated after the VN-Index rose nearly 2.5% so far in January on the back of a 15% jump in 2020.

The rise has been attributed to a significant influx of local investors looking to move cash away from savings accounts which are offering declining interest rate.

“Profit taking pressure dominated the session especially ahead (of the) Tet holiday. Stocks are likely to re-test the trendlines at 1,100 points in the main market,” the VNDirect Securities analyst said.

A broker at Vietcombank Securities said the VN-Index would fall further in the next few sessions and advised investors to stay on the sidelines for at least two weeks.

Meanwhile, a Hanoi-based portfolio manager said the end of January marked an important meeting of the Central Committee of the Communist Party so the market would soon stabilise. ($1 = 23,069 dong) (Reporting by Phuong Nguyen; Additional reporting by Khanh Vu, Shriya Ramakrishnan and Tom Westbrook; Editing by Alexander Smith)

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